What exactly is a home appraisal?

A home appraisal is an independent estimate of what a home is worth. It includes a visual assessment of the condition of the home, and a comparison to other similar properties that have sold, or are for sale, in the same neighborhood. Depending on the location and size of the home, an appraisal can cost anywhere from $300 to $400 or higher. It takes a couple hours and is typically paid for by the person who is borrowing the money: the buyer for a new home purchase, or the homeowner when refinancing.

Do I need a home appraisal?
Most lenders require an appraisal for new home purchases. It protects the lender, buyer and homeowner by letting everyone know the final purchase price is in line with the home’s fair market value.

Appraisals are usually required when it comes to refinancing, but not always. Some loan programs like the FHA Streamline Refinance program don’t require an appraisal if you already have, and refinance to another, FHA loan. Other times, the decision to get an appraisal (and avoid the step and cost altogether) is up to the homeowner. This might happen depending on the type of refinancing loan and terms the borrower applied for, and with which lender. Or the requirement could even be waived as part of a lender’s promotional offer. 

If getting an appraisal is ever an option for you when refinancing, it will likely be in your interest to get one. The reasons include:

Your home might be worth more than what the lender thinks, who might not know about upgrades you’ve made.

If you have private mortgage insurance (PMI), having a home valued too high compared to the loan amount could allow you to get rid of the insurance.

If the lender thinks your home’s value is too high compared to the loan amount, that could give you an interest rate that’s too high

What’s the difference between a home appraisal and a home inspection?
An appraisal is a visual assessment of the obvious condition of the home, including the interior and exterior, and how well the home has been maintained. Appraisals also include what are called “comps.” These are a cost and size analysis and comparison to other similar homes currently for sale, or that were recently sold, in the same neighborhood. A home inspection, on the other hand, is an examination of the structural condition of the home. From appliances to heating and cooling systems, it lets you know if everything is working. It tells you about the condition of the home’s foundation, roof, exterior and all parts of the home’s construction. You’ll find out what works, what’s OK, and what repairs might be needed.

What are comps?
Comps are the most important part of a home appraisal, and are the best way to estimate a home’s value. They compare the home to at least three other recently sold homes in the same neighborhood. They include sale price, age of the house, size, square footage, upgrades and any other distinguishing features, like a pool. Because no two homes are the same, starting with these common characteristics is a good starting point. From there, the estimate is easily adjusted up or down to account for differences – if one property has a pool and another doesn’t, the price of the pool is simply added or subtracted from the estimate. After all the variables have been considered, the final value is then stated as a price per square foot. So two homes with the exact same square footage will have a different estimated value based on all the above factors.

What does an appraiser look for?
Remember, an appraiser only looks at the obvious, visual condition of the home. Not the structural integrity, whether something works or not, is in perfect condition or needs repair. 

Here’s a general list of what an appraiser will look at:
Visual inspections of the foundation, plumbing and electrical systems, exterior and roof
Condition and type of interior walls, flooring, fixtures, and appliances
Amenities: extras like a security or intercom system, solar panels, swimming pool, gazebo
Size and condition of the land the home is on, condition of the yard and landscaping
Remodeling or other upgrades to kitchen or bath, and appliances
Number of bedrooms and bathrooms
Quality of the basement and attic
Surrounding neighborhood and area
Sale price of other area homes
Square footage of the home

The appraisal report
When it’s all over, the lender, and the buyer or homeowner who is refinancing, will receive a final report that will include:
Size, square footage and condition of the home
Notes on any obvious problems or areas requiring repairs
Details on appliances and fixtures throughout the home
It will point out any improvements or remodeling
Description of the neighborhood and surrounding area
Maps, photos and drawings of the property
Comps and an analysis of the current market
Source:Kim Kelman - Prime Lending 210-483-4901

Before You Replace The Windows On Your Home

Windows protect your home from elements such as extreme temperatures, wind, rain, snow, and ice. Inefficient windows may allow outdoor air in, causing your air conditioner and/or heater to work overtime to keep the temperature comfortable inside. Damaged windows can also allow water to seep in, causing more problems inside your home.

Are your windows in good working order? Do they add something to the appearance of your home? Old, worn windows can detract from your home’s curb appeal. If your windows are old or damaged, it might be time to consider investing in new windows for your home.

How do you know if it’s time to replace the windows on your home? If it is time for new windows, do you know what to look for? Use this guide to help you make decisions about replacing windows for your home.

Consider getting new windows if…

Windows are damaged or broken — Even if the window itself is intact, a broken or warped window frame should be replaced before you develop real problems with the window. If the window sticks when you try to open or close it, if you feel a draft coming in or if the windowpanes are foggy, it may be time to replace your window sash or frame — if not the entire window.

You want to lower your energy bill — Windows that let in a draft can drive up your energy bill by as much as 25 percent, according to Energy.gov. Replacing your windows with energy-efficient windows can reduce your heating and cooling bills. Energy-efficient windows can also be a big selling point when it’s time to sell your home.

You’ve been through a severe storm — Wind, humidity, and sea salt can do a number on your windows. If you live in a coastal region or another area prone to severe weather, consider replacing your windows with new windows made with storm-resistant materials, which are better able to withstand the elements.

It’s time for a home renovation project — Whether you’re updating a historic home with vinyl windows, or are just simply giving your home a makeover, leaving the old, worn windows will affect the overall look of your home. Consider replacing old windows with larger windows to let in more natural light, and opt for a window that opens, rather than a fixed window sash. If it’s a historical home you’re working with, look for a company that will make custom windows to ensure your new windows are historically accurate, so as not to detract from the look of the historic home.

If you decide to replace your windows, keep these 4 factors in mind…

Choose a window style — When it comes to choosing new or replacement windows, you have some options on style. Here are some basic options to consider:
Single or double hung windows — The most common windows in homes, single or
double windows consist of two separate sashes that open by sliding up or down. A single hung window opens from the bottom, while a double hung window can open from top or bottom.

Casement windows —  windows with one large sash that opens by swinging out.
Awning windows — Hinged at the top, they open by tilting the window out from the bottom. Awning windows are especially popular in coastal regions.
Slider windows — If space is limited outside and there’s not room for windows that open outwards, these are another great option in addition to single or double hung windows. Slider windows open by sliding side to side.

Choose window frame and sash materials — The most popular window materials are wood or vinyl. Wood windows have a more classic, beautiful appearance, but they require more maintenance. Vinyl windows, are popular because they are essentially maintenance-free and are lower in cost than wood windows. You also have the option of vinyl-clad windows, which are wood on the inside with a vinyl coating and wood frame on the outside.

Choose window glass — When choosing which glass to use, there are two basic types to choose from

Low emissivity (Low-E) glass — This glass has a thin, layer of material on the window to reduce the flow of heat through the glass.
Impact resistant glass — Although it may crack, impact resistant glass will not shatter when hit hard.

Consider the quality and compare warranties — Replacing windows can come with a bit of sticker shock, but keep in mind that you get what you pay for. Choose a high-quality window from a well-known company to get the energy saving, low maintenance, durable windows you’re looking for. Be mindful that warranties vary from one manufacturer to the next, so be sure to take a close look at the warranty before you buy. Well-known companies tend to offer the most solid warranties for their products and are more likely to still be around should you encounter any problems with your windows.

Once you choose a window, look for a contractor who is trained by the window manufacturer. Your local Home Builders Association can also help put you in touch with window contractors in your area.

Knowing when it’s time to replace your windows, and choosing the right windows for your home can make a big difference in the value of your home when it’s time to sell.
Source: Kim Kelman - Prime Lending 210-483-4901

Change of Season - Home Maintenance Tips

Before it gets too nasty to work outdoors, take the month to button up your home for the rough weather to come. Here is a handy checklist of home maintenance tasks that need to be completed this month, plus tips for how to do them faster and easier, or with the help of a pro.

1. Weatherproof the house  - 
Locate and seal cracks and spaces that let heat out and cold air in—along baseboards, wall/ceiling junctures, windows, and doors, lighting fixtures, switches, and electrical outlets. Your wallet will thank you because energy savings from reducing drafts range from 5% to 30% per year. For tips on doing an energy audit on your home go to the U.S. Department of Energy.

Tip: At night, ask a partner to walk outside while you turn off all lights and shine a flashlight along doors and windows (tell the neighbors not to call the police). The light will illuminate large cracks. Small ones won’t likely show up, however. For those, light a candle or incense stick and pass it along potential leak areas. If the flame or smoke wavers, you’ve got a leak.

A home audit that finds all the nooks and crannies where energy escapes costs $375 on average. Painters ($25 to $100 an hour) will seal gaps with caulk. Handymen ($30 to $50 an hour) can install weatherstripping.

2. Check fire alarms - Dead batteries cause 24% of smoke alarm failures, putting your family at greater risk of a fire. You should replace batteries or test hard-wired fire alarms twice a year. You knew this, right? Fine, we don’t mind reminding you.Check those batteries for safety, and to stop the beeping.

Tip: Don’t remember when you tested your detector last? Get into the habit of testing the alarm and changing batteries on a specific date like the start of the new year. 

3. Service the HVAC system - Make sure your heating system is running safely and efficiently so you’ll stay toasty during cold weather and save money on energy bills.
Tip: You can unclog and clean HVAC grilles by popping them in the dishwasher. (Leave out the dishes, preferably.) Also make sure you dust heating returns and change filters every one to three months.
An HVAC expert ($60 to $85 an hour) is the best person to inspect and tune up your system, which will include checking controls, lubricating moving parts, and making sure no carbon monoxide is leaking.
4. Clear dead leaves - Dead leaves aren’t just unsightly—they’ll also kill your lawn. Rake and bag ’em for removal.

Tip: Mulch leaves in place by running your mower over them and letting the pieces decompose and nourish your lawn all winter.

Lawn maintenance services charge on average $50 to rake leaves. While they’re raking, have them aerate and reseed your lawn so it will green up faster in spring.

5. Clean patio furniture - Before storing your outdoor furniture for the winter, take this opportunity to give them a good cleaning so you don’t have to do it in the spring, at which point the dirt and grime will be way harder to remove.
Tip: Brillo is a great scrubber to remove crud from plastic patio furniture. Just scrub and rinse. Or, train a power washer onto the furniture for a quick clean.
A professional pressure washing costs about 8 cents to 35 cents per square foot. You probably won’t persuade one to clean only your patio furniture, but you can always add this task to a bigger job—such as pressure washing a fence or driveway—for extra productivity points.
6. Secure the home from pests - Critters are just like you: When it’s cold outside, they want to go where it’s warm. “An attic offers a fantastic retreat for rodents like rats and mice to spend the winter,” says Nancy Troyano, director of technical education and training for Rentokil Steritech, a pest control company. But unlike you, mice and snakes can get through a hole the size of a quarter. Don’t let them! Replace all damaged roof tiles and attic vents before it snows, and seal up holes around plumbing pipes and cables that enter your house.
Tip: There really aren’t any shortcuts to patching holes, which you’ll have to cover or fill with something such as wood putty, flexible brick, or concrete caulking. Just make sure you don’t wait too long to make the repairs, because the colder the temperature, the longer the filler will take to cure.
Painters ($25 to $100 an hour) and handymen ($30 to $50 an hour) will patch holes in your home’s exterior.

So, are you prepared for winter after checking off this list? Anything else you'd like to suggest?

How To Hire a Remodeling Contractor

Whether you're planning on selling a home and doing some remodeling first or buying and updating one, you'll save time and frustration if you keep in mind these helpful tips. 

Shop around and get at least three written estimates.
Don't just call the first contractor's name you see in an ad. That 20% off deal, might not be a good deal. Ask for and check references. If possible, look at jobs the contractor recently completed.
Check with your local chamber of commerce or Better Business Bureau for complaints. Be sure that the contractor has the necessary licenses (confirm them online) and insurance, as well as the ability to obtain permits. Ask if the contractor’s workers will do the entire job or whether subcontractors will be involved.

Read the contract carefully.
Be sure the contract states exactly what is to be done and how change orders will be handled.
Check that the contract states when the work will be completed and what recourse you have if it isn’t.
Make sure the contract indemnifies you if work does not meet building codes or regulations. Confirm that they will get the necessary permits and sign-offs for final inspections. Be sure that the contract specifies who will clean up after the job and be responsible for any damage.
Ensure that the materials meet your specifications.
Confirm that what they promised to supply is what they deliver.

Seal the deal.
Remember, you can often cancel a contract within three business days of signing it. Make a small down payment, so you won’t lose much if the contractor fails to complete the job.

Don’t make the final payment until you’re satisfied with the work. 

Have the right expectations
Understand that most remodeling work will take longer than expected and may go over budget if problems show up.
Source: Realtor.org

Thinking of buying or selling? Send me an email through the link on the right. I’d be happy to help you get happily moved to your new home!

Loans & Lending Terms to Know

When you make the decision to buy a home, you'll start to hear all sorts of words that may seem strange. Here are some tips to put you in the "know."

Loan Term.
Mortgages are generally available at 15-, 20-, or 30-year terms. In general, the longer the term, the lower the monthly payment. However, shorter terms mean you pay less interest over the life of the loan.
Fixed vs. adjustable interest rates.
A fixed rate allows you to lock in a low-interest rate as long as you hold the mortgage and, in general, is a good choice if interest rates are low. An adjustable-rate mortgage (ARM) usually offers a lower rate that will rise as market rates increase. ARMs usually have a limit as to how much and how frequently the interest rate can be increased. These types of mortgages are a good choice when fixed interest rates are high or if you expect your income to grow significantly in the coming years.
Non-traditional mortgages.
Also sometimes called exotic, portfolio or in-house loans. These mortgage types were common in the run-up to the housing crisis, and often featured loans with low initial payments that increase over time.
Balloon payment mortgage.
This is a form of non-traditional financing where your interest rate will be very low for a short period of time—often three to seven years. Payments usually only cover interest so the principal owed is not reduced. This type of loan may be a good choice if you think you will sell your home at a large profit in a few years.
Government-backed loans.
These loans are sponsored by agencies such as the Federal Housing Administration or the Department of Veterans Affairs. They offer special terms, including reduced interest rates to qualified buyers. VA Loans are open to veterans, reservists, active-duty personnel, and surviving spouses and are one of the only options available for zero down payment loans. FHA loans are open to anyone, and while they do require a down payment, it can be as low as 3.5%. Drawbacks include a slower loan process and—for FHA loans—the need to pay mortgage insurance.
However… As the housing market shifts, so do lending practices. A mortgage broker—an independent professional who acts as an intermediary between you and lending institutions—may be able to help you find a better rate than you can on your own. Also, be sure to shop around; slight variations in interest rates, loan amounts, and terms can significantly affect your monthly payment. But make sure you get all the details.
Source: Realtor.org

Thinking of buying or selling? Send me an email through the link on the right. I’d be happy to help you get happily moved to your new home!

How to Hold a Successful Garage Sale

Garage sales can be a great way to get rid of clutter and earn a little extra cash before you move. But make sure you plan ahead; they can take on a life of their own.
1. Don’t wait until the last minute.
Depending on how long you’ve lived in your home and how much stuff you want to sell, planning a garage sale can take a lot of time and energy. And that’s on top of the effort of putting your home on the market!
Contact your local government.

Some municipalities will require you to obtain a permit in order to hold a garage sale. They’re often free or cheap, but the fines for neglecting to obtain one can be hefty.
See if neighbors want to join in.

You can turn your garage sale into a block-wide event and lure more shoppers. However, a permit may be necessary for each homeowner, even if it’s a group event.
2. Schedule the sale.
Sales on Saturdays and Sundays will generate the most traffic, especially if the weather cooperates. Start the sale early — 8 or 9 a.m. is best — and be ready for early birds.

Place an ad in the newspaper, free classified papers, and websites, including the date(s), time, and address of the garage sale. Add information about what will be available, such as kids’ clothes, furniture, or special equipment. On the day of the sale, use balloons and signs with prominent arrows to grab attention.
3. Price your goods.
Clearly mark rounded prices (50 cents, 3 for $1, or $5, for example) with easily removable stickers.

4. If it’s junk, recycle or donate it.
If it’s truly garbage, throw it away or place it in a freebie bin. Don’t try to sell broken appliances, and have an electrical outlet nearby in case a customer wants to try plugging something in.

5. Display items nicely.
Organize by category, and don’t make customers dig through boxes.
6. Stock up on wrapping supplies.
Having a stock of old shopping bags that can be reused encourages people to buy more items. Newspapers are handy for wrapping fragile goods.
7. Keep track of your money.
Obtain ample change for your cashbox - that means a minimum of 20-30 $1 bills, 10 $5 bills, and a $10 roll of quarters. Have a calculator on hand for multiple sales. Assign one person to handle the “register,” keeping a tally of what was purchased and for how much.

Thinking of buying or selling? Send me an email through the link on the right. I’d be happy to help you get happily moved to your new home!

How to Prepare to Finance a Home

When you decide you want to buy a home, it makes sense to plan ahead. Here are some tips to get you started. 

Develop a budget.
Instead of telling yourself what you’d like to spend, use receipts to create a budget that reflects your actual habits over the last several months. This approach will better factor in unexpected expenses alongside more predictable costs such as utility bills and groceries. You’ll probably spot some ways to save, whether it’s cutting out that morning trip to Starbucks or eating dinner at home more often.

Reduce debt.
Lenders generally look for a debt load of no more than 36% of income. This figure includes your mortgage, which typically ranges between 25 and 28% of your net household income. So you need to get monthly payments on the rest of your installment debt—car loans, student loans, and revolving balances on credit cards — down to between 8 and 10% of your net monthly income.

Increase your income.
Now’s the time to ask for a raise! If that’s not an option, you may want to consider taking on a second job to get your income at a level high enough to qualify for the home you want. And don't think of that income as spending money - it's savings for your down payment.

Designate a certain amount of money each month to put away in your savings account. Although it’s possible to get a mortgage with 5% down or less, you can usually get a better rate if you put down a larger percentage of the total purchase. Aim for a 20% down payment to save on monthly private mortgage insurance.
Stay at your job.
While you don’t need to be in the same job forever to qualify for a home loan, having a job for less than two years may mean you have to pay a higher interest rate.

Establish a good credit history.
Get a credit card and make payments by the due date. Do the same for all your other bills, too. Pay off entire balances as promptly as possible.
Start saving.

Besides your down payment, don’t forget to factor in closing costs, which can average between 2 and 6% of the home price.
Know your credit score.
Make sure it is accurate and correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
Get Pre-approved for a mortgage. Know what you can afford.Generally, you want to look for homes valued between two and three times your gross income, but a financing professional can help determine the size of loan for which you’ll qualify. Find out what kind of mortgage (30-year or 15-year? Fixed or adjustable rate?) is best for you. Also, gather the documentation a lender will need to preapprove you for a loan, such as W-2s, pay stub copies, account numbers, and copies of two to four months of bank or credit union statements. Don’t forget property taxes, insurance, maintenance, utilities, and association fees, if applicable.

Review options for down payment assistance.
Check with your state and local government to find out whether you qualify for a special mortgage or down payment assistance programs. If you have an IRA account, you can use the money you’ve saved to buy your first home without paying a penalty for early withdrawal.
Source: Realtor.org

Thinking of buying or selling? Send me an email through the link on the right. I’d be happy to help you get happily moved to your new home!

What to Consider Before Putting Your Home up for Sale

Here are a few items to take care of before listing your home. This can make the sale process quicker and easier in the long run.

Consider a pre-sale home inspection. 

An inspector will be able to give you a good indication of the trouble areas that will stand out to potential buyers, and you’ll be able to make repairs before open houses begin.

Organize and clean. 
Pare down clutter and pack up your least-used items, such as large blenders and other kitchen tools, out-of-season clothes, toys, and seasonal items. Store items off-site or in boxes neatly arranged in the garage or basement. Clean the windows, carpets, walls, lighting fixtures, and baseboards to make the house shine.

Get replacement estimates. 
Do you have big-ticket items that will need to be replaced soon? Find out how much it will cost to repair an older roof or replace worn carpeting, even if you don’t plan to do so. The figures will help buyers determine if they can afford the home, and they’ll be handy when negotiations begin.

Locate warranties. 
Gather up the warranties, guarantees, and user manuals for the furnace, washer/dryer, dishwasher, and any other items that will remain with the house. It may seem like this task can be left until closing, but you don’t want lost paperwork or last-minute scrambling to cause the deal to fall through.

Spruce up the curb appeal.
Walk out to the front of your home, close your eyes, and pretend you’re a prospective buyer seeing the property for the first time. As you approach the front door, what is your impression of the property? Do the lawn and bushes look neatly manicured? Is the address clearly visible? What do you see framing the entrance, if anything? Is the walkway free of cracks and impediments?
Source: Realtor.org

Thinking of buying or selling? Send me an email through the link on the right. I’d be happy to help you get happily moved to your new home!

6 Home Buying Myths

Most home buyers get a lot of advice from friends and family – some good, some bad. A lot of myths can pop up and negatively guide your home purchasing experience. Make sure you don’t fall for one of these common buying falsehoods.

1. The only upfront cost is the down payment.You need to be prepared for several expenses – everything from fees, taxes, costs for inspections, credit reports, insurance, and others. Closing costs can be anywhere from 3 percent to 6 percent of the purchase price. Those costs can fluctuate greatly depending on the state you live in too.

2. Just looking for a house casually is not a big deal.
If you think you want to start looking at homes to get a feel for the area, before you even sit down with a REALTOR®, you may be setting yourself up for a major heartbreak of falling for a home you can't afford. Home shoppers – even at the earliest stages – should get pre-approved for a mortgage so you know your budget from the get-go and don’t waste time looking at homes that are out of their price range.

3. You must have a 20% down payment.
Yes, a 20% down payment will help a buyer avoid paying private mortgage insurance. But 20% down isn’t required. Many lenders will still qualify a buyer for home loans with 10% or 5%. Some buyers can even qualify for only 3.5%. There are many options for down payment assistance that lenders can explore with a buyer who has a limited amount to put down.

4. Schools shouldn’t matter if you don’t have kids.
The neighborhood you choose matters – even if you don't have school-age children. When you want to sell later on, that could be a big factor to your buyer and the timing to sell your home. Good schools are a sign of a good neighborhood. You should explore all the neighborhood factors that could influence your home's appreciation and desirability.

5. You don’t need a home inspection.When the housing market is extremely competitive, some home shoppers may be willing to waive the home inspection in order to get the home they want. But as the saying goes, buyer beware. It means you’ll get the home as is, including any and all problems that come with it. And sometimes those problems aren’t exactly visible with a simple walk-through of the home. Hire an expert. It will pay off in the long run. 

6: A 30-year mortgage is the best option
If you think that the longer you agree to invest in your home, the cheaper the mortgage payments will be, think again.

Most people opt for 30-year fixed-rate mortgages and for a valid reason: Monthly payments for a 30-year fixed-rate mortgage are lower than its 15-year counterpart.

But consider this: You could end up paying more during the life of the loan if you pick the 30-year option instead of the 15-year mortgage. That’s because essentially, with a 30-year loan, you’re borrowing the same amount of money for twice as long—at a higher interest rate.

Source: Realtor.org

Thinking of buying or selling? Send me an email with the link to the side. I'd be happy to help you find the home that best suits your needs. 

The Tax Benefits of Owning

The tax deductions you’re eligible to take for mortgage interest* and property taxes greatly increase the financial benefits of home ownership. Let’s work through a hypothetical situation to see how it works.
Let's do an example and use the following information:
   $9,877 Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)
+$2,700  Property taxes (at 1.5 percent on $180,000 assessed value)
 $12,577 Total deduction

Then, multiply your total deduction by your tax rate.**  
For example, at a 28 percent tax rate: $12,577 x 0.28 = $3,521.56
$3,521.56 = Amount by which you have lowered your federal income tax

*Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level.
**The rate at which you’re taxed is determined by your tax bracket, which in turn is determined by how much you earned in a given year along with your filing status (single, married filing jointly, married filing separately, or head of household). IRS Publication 501 will help you determine your rate.
Changing Real Estate Dreams Into Realty Since 1985
Christine Henderson - BH&G Bradfield Properties 210-827-2858

Worksheet: Calculate Capital Gains

When you sell a stock, you owe taxes on the difference between what you paid for the stock and how much you got for the sale. The same holds true in home sales, but there are other considerations.
How to Calculate Gain
Your home’s original sales price when you bought it (not what you brought to closing).

Additional costs you paid toward the original purchase (include transfer fees, attorney fees, and inspections but not points you paid on your mortgage).
Cost of improvements you’ve made (include room additions, deck, etc. Improvements do not include repairing or replacing existing items).
Current selling costs (include inspections, attorney fees, real estate commission, and money you spent to fix up your home to prepare it for sale).
Add the above items to get your adjusted cost basis:
The final sale amount for your home.

The adjusted cost basis figure from above.
Your capital gain:

A Special Real Estate Exemption for Capital Gains
Up to $250,000 in capital gains ($500,000 for a married couple) on the home sale is exempt from taxation if you meet the following criteria: (1) You owned and lived in the home as your principal residence for two out of the last five years; and (2) you have not sold or exchanged another home during the two years preceding the sale. You may qualify for a reduced exclusion if you otherwise qualify but are short of the two-out-of-the-last-five-years requirement if you meet what the tax law calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.
This is not meant as tax or legal advice. For complete details on capital gains on your home, consult a tax attorney or CPA.
Changing Real Estate Dreams Into Reality Since 1985

Christine Henderson   210-827-2858   
BGH&G Bradfield Properties

How to Improve Your Credit

Credit scores play a big role in determining whether you’ll qualify for a loan and what your loan terms will be. So, keep your credit score high by doing the following:

Check for errors in your credit report.

Thanks to an act of Congress, you can download one free credit report each year at annualcreditreport.com. If you find any errors, correct them immediately.

Pay down credit card bills.

If possible, pay off the entire balance every month. Transferring credit card debt from one card to another could lower your score.

Don’t charge your credit cards to the max.

Pay down as much as you can every month.

Wait 12 months after credit difficulties to apply for a mortgage.

You’re penalized less severely for problems after a year.

Don’t order items for your new home on credit.

Wait until after your home loan is approved to charge appliances and furniture, as that will add to your debt.

Don’t open new credit card accounts.

If you’re applying for a mortgage, having too much available credit can lower your score.

Shop for mortgage rates all at once.

Having too many credit applications can lower your score. However, multiple inquiries about your credit score from the same type of lender are counted as one if submitted over a short period of time.

Avoid finance companies.

Even if you pay off their loan on time, the interest is high and it may be considered a sign of poor credit management.
Changing Real Estate Dreams Into Realty Since 1985

Christine Henderson - BH&G Bradfield Properties 210-827-2858

What to Know About Credit Scores

Credit scores range between 200 and 850, with scores above 620 considered desirable for obtaining a mortgage. The following factors affect your score:

Your payment history.

Did you pay your credit card bills on time? Bankruptcy filing, liens, and collection activity also affect your history.

How much you owe and where. 

If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, spreading debt among several accounts can help you avoid approaching the maximum on any individual credit line.

The length of your credit history.

In general, the longer an account has been open, the better.

How much new credit you have.

New credit—whether in the form of installment plans or new credit cards—is considered more risky, even if you pay down the debt promptly.

The types of credit you use.

Generally, it’s desirable to have more than one type of credit—such as installment loans, credit cards, and a mortgage.

The length of your credit history.

In general, the longer an account has been open, the better.

How much new credit you have.

New credit—whether in the form of installment plans or new credit cards—is considered more risky, even if you pay down the debt promptly.

The types of credit you use.

Generally, it’s desirable to have more than one type of credit—such as installment loans, credit cards, and a mortgage.
Changing Real Estate Dreams Into Realty Since 1985
Christine Henderson - BH&G Bradfield Properties 210-827-2858

Questions to Ask When Considering Selling

These questions will help you decide whether you’re ready for a home that’s larger or in a more desirable location. If you answer yes to most of the questions, you may be ready to move.

Have you built substantial equity in your current home?

Check your annual mortgage statement or call your lender to find out how much you’ve paid down. Usually you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest. But if you’ve owned your home for five or more years, you may have significant, unrealized gains.

Has your income or financial situation changed?

If you’re making more money, you may be able to afford higher mortgage payments and cover the costs of moving. If your income has decreased, you may want to consider downsizing.

Have you outgrown your neighborhood?

The neighborhood you pick for your first home might not be the same one in which you want to settle down for good. You may have realized that you’d like to be closer to your job or live in a better school district. 

Are there reasons why you can’t remodel or add on?

Sometimes you can create a bigger home by adding a new room or building up. But if your property isn’t large enough, your municipality doesn’t allow it, or you’re simply not interested in remodeling, then moving to a bigger home may be your best option.

Are you comfortable moving in the current housing market?

If your market is hot, your home may sell quickly and for top dollar, but the home you buy will also be more expensive. If your market is slow, finding a buyer may take longer, but you’ll have more selection and better pricing as you seek your new home. Ask your real estate professional what they see happening locally.

Are interest rates attractive?

Low rates help you buy “more” home, and also make it easier to find a buyer for your current place.

Is the effort and cost of maintaining your current home becoming difficult to manage?

A REALTOR ® can help you decide whether a smaller house, condo, or rental would be appropriate.
Changing Real Estate Dreams Into Reality Since 1985

Christine Henderson   210-827-2858   
BGH&G Bradfield Properties

Setting a Budget to Buy a Home

Track Your Budget
The first step in getting yourself in financial shape to buy a home is to know exactly how much money comes in and how much goes out. Use this worksheet to list your income and expenses below.



Total Take-Home Pay

Total Rent/Mortgage

Child Support/Alimony

Child Support/Alimony

Pension/Social Security

Health Insurance

Disability/Other Insurance

Life Insurance


Other Insurance


Vehicle Insurance

Vehicle Payments

Vehicle Upkeep

Other Loans


Credit Card Payments

Savings/Pension Payment


Clothes/Personal Care


Household Goods

Child Care


Charitable Donations

Eating Out


Total Income:

Total Expenses:

Remaining Income After Expenses (subtract total income from total expenses): _______________________
Changing Real Estate Dreams Into Realty Since 1985
Christine Henderson - BH&G Bradfield Properties 210-827-2858